What is the primary purpose of fixed assets in a business?

The primary purpose of fixed assets in a business is long-term use. Fixed assets, such as buildings, machinery, and equipment, are intended to be used over an extended period, typically more than one year. These assets are essential for a company's operations as they are utilized to produce goods or services that drive revenue generation. Unlike current assets, which are expected to be converted into cash or used within a year, fixed assets are crucial for sustaining ongoing business activities and investments. They contribute to the company’s overall capacity to operate efficiently and effectively, supporting various functions over their useful life.